SEISS fifth grant tax explained – but warning as ‘reckoning’ coming for some Britons
SEISS or the Self-Employment Income Support Scheme has offered important support through a number of grants. The fifth and final grant will be able to be claimed shortly, but the rules have slightly changed, leaving some confused. To clear up any uncertainty, Simon Warne, Partner in the Private Clients team at Crowe UK, spoke exclusively to Express.co.uk about the matter.
Before making a claim for the fifth self-employment grant, individuals will need to work out their April 2020 to April 2021 turnover.
They will then need to use their turnover from either 2019 to 2020 or 2018 to 2019 to use as a reference point when making a claim.
Turnover figures can be found in a Self Assessment tax return, on accounting software or through bookkeeping or spreadsheets, for example.
If turnover is down by 30 percent or more, then a person will get 80 percent of three months’ average trading profits – capped at £7,500.
However, if turnover is down by less than 30 percent, a lower grant amount will be offered.
This will be worked out at 30 percent of three months’ average trading profits, capped at £2,850.
The Chancellor Rishi Sunak has said it is important to gear the next level of support to those who need it most.
But when it comes to tax, it is important to pay attention to the fifth grant, and what steps will need to be taken next.
Mr Warne added: “Those who are in receipt of any of the SEISS grants will need to remember to put them on their tax returns and consider whether they have been overpaid in respect of previous grants.
“If there have been overpayments then HMRC should be informed.”
A major condition of the latest grant relates to the business a self-employed person undertakes.
Under the rules, self-employed individuals must state they intend to continue in business in 2021/22, for example.
But an equally vital issue to consider when submitting a claim to HMRC is honesty – which is always the best policy.
With schemes coming to an end, the Government is looking in detail into claims to ensure everyone is claiming fairly.
This was a matter Mr Warne touched upon in his conclusion, urging caution.
He said: “Traders who continue to struggle in tough conditions and sectors particularly affected by COVID-19 will see this as a lifeline, which will allow them to continue to trade for the time being.
“For those who have gamed the system, a reckoning may be approaching.”
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Business News Click Here